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Question: calculate the average collection period what does it indicate what...

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EXHIBIT 1: POSEIDON HISTORICAL FINANCIAL STATEMENTS (IN CAS THOUSANDS) Panel A: Statements of Financial Position March 31, 2012 June 30, 2012 September 30, 2012 December 31, 2011 Statements of Financial Position Assets Current assets 1,828 83,018 720 4,108 89,674 6,945 45,589 142,208 3,461 125,516 4,362 6,507 139,846 2,484 59,451 201,781 Cash and cash equivalents Accounts receivable Prepaid expenses and deposits Inventory 12,124 118,641 2,507 6,430 139,702 2,586 50,471 192,759 53.595 1,105 2,856 57,556 11,492 33,836 102,884 Deferred taxes Property, plant, and equipment Liabilities Current liabilities Accounts payable and accrued liabilities Dividends payable Current taxes payable Bank indebtedness Due to Open Range Note payable 17,803 12,437 7,299 6,600 7.405 6,600 7,296 6,725 18,305 36.419 10,066 84,156 10,000 35,099 37,951 37,107 Deferred taxes Long-term debt 1,635 55,544 34,544 72,495 35,099 84,156 Shareholders Liabilities Share capital Contributed surplus Accumulated other comprehensive income (loss) Retained earnings (deficit) 378,603 7,074 (584) 92,616 9,256 783 92,616 11,566 (232) 299,531 (277,984) 107,109 17,609 120,264 (286,306) 107,495 201,781 18,728 102,884 142,208 192,759

Three Months Ended Three Months Year Ended Three Months Ended March 31, 2012 Three Months Ended March 31, 2011 Three Months Ended June 30, 2012 Three Months Ended June 30, 2011 Ended December 31 september Ended September eptember 2011 30, 2012 30, 2011 41,116 78,767 Operating 2,658 11,293 40,836 12,378 2 6 Operating income 18,918 61,338 income) items: 2 18,785 10,468 15,581 3 45,000

Calculate the average collection period. What does it indicate?

What red flags can be identified from the financial statements?

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